Well, today I deployed an early version of my wp-aspxrewriter component to my personal blog.
This component is an ASP.NET HttpModule in conjunction with a Wordpress plugin and code hack (official patch for the hack submitted at their trac site) which allows 100% pretty permalinks under IIS6.
The current mechanism is grim. A request to a non-existent .aspx page invokes the handler. The handler looks through its regex collection and if a match is found it submits an *http request* to the matching url (impersonating all aspects of the user - just like SSImp) and then filters this back to the client. In short, it is a transparent proxy.
Now I *think* that with IIS7's new pipeline functions it might be possible to force a Server.TransferRequest to a .php file and have IIS handle it properly (ie. select a new handler, be that ISAPI or CGI/FastCGI), but I still need to test this. In the meantime, I have applied for Wordpress hosting for the plugin and am awaiting some response from them. I furthermore would love it if people would browse around on Recourse for Discourse and let me know if anything looks broken.